Al Gore’s Sale of Current TV to Al Jazeera English Explained

Current TV, the semi-relevant and liberal-leaning television network was recently sold to Al Jazeera English for a reported $500 million. Before most Americans panic at the thought of a Muslim-sounding television station broadcasting in the United States, let me assure you that Al Jazeera English is a legitimate news outfit.

More about Al Jazeera later. Let’s take a closer look at the deal that put $100 Million in Mr. Gore’s pocket.

Founded in 2002 by the former Vice President and Joel Hyatt, Current TV graced the silver screen in 2005. From its inception through today, Gore led cable providers to broadcast Current TV into 60 million homes. Barely anybody watched the station, as evident by the $20 million in advertising revenue.

The distribution to 60 million homes is impressive and one of the reasons why Al Jazeera English made the purchase. How did a network with unattractive programming gain this level of broadcast distribution and attract an international media conglomerate?

In a NY Times interview Mr. Gore said he secured the distribution, “…through a combination of personal lobbying and arm-twisting of industry giants”. This is an excellent example of former politicians using their influence to ultimately interfere with the market.

Once a station is picked up by a cable provider, money is routinely paid to the station by the cable provider. This is a carriage-fee. Cable provider’s do not mind the carriage-fee because they pass the price difference to the consumer at a premium.

Current TV’s sale to Al Jazeera English is less a story about an international media company broadcasting in the United States and more about the power & influence politicians can wield to get what they want and flip a company for half a billion dollars.